Research › Search › Judgment

Calcutta High Court · body

2019 DIGILAW 218 (CAL)

Ashok Kumar Agarwal v. State of West Bengal

2019-02-14

JAY SENGUPTA

body2019
JUDGMENT : Jay Sengupta, J. 1. This is an application for quashing of a proceeding in Complaint Case No. CN/8454/ 2017 presently pending before the Learned Metropolitan Magistrate, 18th Court, Calcutta under Sections 406, 420 read with Section 120B of the Penal Code including the order dated 08.11.2017 issuing process against the accused/petitioner. 2. The Learned Counsel appearing on behalf of the accused/petitioner submitted that the crux of the allegations in the petition of complaint is that the accused did not honour their commitment that they would pay the entire invoice amount in question through an irrevocable 90 days' Letter of Credit (LC) from the date of delivery of the materials against each lot at the project site. He submitted that the purchase order was dated 04.02.2014 and was not of 2016. With respect to the purported amendment dated 12.02.2014 to the agreement, he submitted that 100% payment was to be released in favour of the seller through irrevocable LC of 60 days from the date of delivery of material against each lot of the project site, but subject to submission of relevant documents. 3. The Learned Counsel referred to the appointment letter of the petitioner by the accused/ company and submitted that the petitioner joined the company as a Director on 01.12.2015. He also relied on a document issued by the Ministry of Corporate Affairs to show that the petitioner ceased to be Director of the said company on 02.08.2016. He submitted that as such, the petitioner would not have threatened the complainant on 10.01.2017 as alleged by which time he had retired as a Director. He contended that no liability arose when the petitioner was a Director of the company. The Learned Counsel further submitted that even the initial deposition was quite confusing regarding the relevant dates. 4. The Learned Counsel submitted that the petitioner had practised no deception. In any event, the intention to cheat had to exist from the very inception, which was not the case here. On this, he relied on VESA Holidays Pvt. Ltd. and Another vs. State of Kerala and Others, (2015) 8 SCC 293 and Jose and Another vs. State of Gujarat and Another, (2009) 3 SCC 78 . He also contended that if at all, the misappropriation was done by the accused company and the petitioner could not be held vicariously liable for the same. 5. He also contended that if at all, the misappropriation was done by the accused company and the petitioner could not be held vicariously liable for the same. 5. The Learned Counsel appearing on behalf of the complainant/opposite party submitted that a prima-facie case was clearly made out against the accused/petitioner as would be evident from a plain reading of the petition of complainant and the initial depositions. He too referred to the amendment and contended that admittedly the payment was to be made within 60 days of receipt of the goods in question. He submitted that the said goods were received by the accused on 15.05.2016 and 17.05.2016. Therefore, the payments were to be made by 15.07.2016. So, even as per the petitioner's own claim, he resigned from the accused company only after the liability arose. 6. The Learned Counsel submitted that the petitioner joined the company as a Director on 01.12.2015 and the letter of credit was issued on 20.04.2016. A letter of credit creates a confidence that the payment is ensured. According to him, this was the tool used to deceive the complainant at the very inception. 7. The Learned Counsel submitted that there were clear averments in the petition of complaint that the petitioner was responsible to and in charge of the company for the day to day business and regular affairs of the company. Whether these were correct or not are disputed questions of fact. He submitted that the petitioner admittedly earned a monthly salary of about Rs. 6.6 lakhs and this showed that he was quite in charge. He contended that the question of vicarious liability did not arise as there were direct allegations against the petitioner as contained in paragraph 2 of the petition of complaint. He prayed that the proceeding may not be inferred with at this initial stage. 8. I heard the submissions advanced by the learned counsels of both the parties and carefully perused the revision petition along with its annexure. 9. He prayed that the proceeding may not be inferred with at this initial stage. 8. I heard the submissions advanced by the learned counsels of both the parties and carefully perused the revision petition along with its annexure. 9. First, even if one looks into the documents regarding appointment and resignation of the petitioner as a Director of the accused company and juxtaposes the two with the amendment dated 12.02.2014 and the alleged dates of supply of goods, it appears that bulk of the liability of the accused and consequently, a part of the cause of action arose during the association of the petitioner with the accused company as a Director. 10. Moreover, it does not appear that the petitioner has only been attributed with vicarious liability. A direct role has been ascribed to him as regards the commission of the offences. Any further attempt to separate the chaff from the grain would require leading of evidence and thus is not warranted at this initial stage. 11. A letter of credit opened by a purchaser with a bank indeed inspires a great degree of confidence in the mind of a seller. If the same is not honoured, it shakes the very basis of the agreement entered into. Therefore, if the dishonour is done deliberately then the initial assurance by projecting a letter of credit may tantamount to an initial deception as required in a case of cheating. 12. In the facts and circumstances, whether liability actually arose during directorship of the petitioner in the accused company, whether the petitioner was directly responsible for the wrongdoing and whether the letter of credit actually acted as a tool for initial deception are all disputed questions of fact and cannot be decided before trial. At this stage, a Court cannot entertain a mini trial to find out the truth when a prima-facie case seems to have been made out against the present petitioner in the facts and circumstances of the present case. 13. In view of the above discussions, the prayer for quashing of proceeding is refused. The revisional application is dismissed. However, the petitioner shall be at liberty to raise all the points taken up in this application during trial. 14. A copy of the judgment along with the Lower Court records shall be sent down to the learned Trial Court forthwith by a Special Messenger for information and necessary action. 15. The revisional application is dismissed. However, the petitioner shall be at liberty to raise all the points taken up in this application during trial. 14. A copy of the judgment along with the Lower Court records shall be sent down to the learned Trial Court forthwith by a Special Messenger for information and necessary action. 15. Urgent photostat certified copies of this judgment may be delivered to the learned Advocates for the parties, if applied for, upon compliance of all formalities.